Home>Levelset Community>Legal Help>On Public Private projects we have been told we cannot file a lien because the property is “public” property but also have been told that the project does not have a bond because it is a commercial project. While the majority of city, county (parish), and state work is covered by "Little Miller Acts", where do public/private projects fall?

On Public Private projects we have been told we cannot file a lien because the property is “public” property but also have been told that the project does not have a bond because it is a commercial project. While the majority of city, county (parish), and state work is covered by "Little Miller Acts", where do public/private projects fall?

We have had several public private projects where the state provides the land/buildings and the private entity will provide the funds to construct/remodel for affordable housing or other ventures. But mainly affordable housing similar to apartments/condos. We have several write offs because we attempt to pursue commercial rights but can not then we attempt to acquire bond information only to be told there is none. It is a bit infuriating.

1 reply

Nov 13, 2018

That's a great question. First, it's worth noting that P3 projects are treated differently in every state, and whether bonding will be required can vary as well. Further, underlying factors can also affect these projects and what rights could be present (for example, if the property is privately owned, and the public partner is merely providing funding or services, lien rights could be available). However, the situation you described above isn't unheard of - and it can be horribly frustrating for parties caught in the middle. As you mentioned above, public property cannot be liened - so the strongest method for recovery (a mechanics lien) could be off the table. Further, depending on the state's Little Miller Act and/or P3 legislation on the books, a project might not have a bond present, either. In such a situation - where neither a bond claim nor a lien claim is available - subs and suppliers can feel a bit helpless, and rightfully so. zlien discusses this idea more in depth in this article: Public Private Partnerships – What’s The Protection? However, while lien and bond claims might not be an option, that doesn't mean there are no tools available for recovery. Rather, recovery might be more similar to other industries - such as via sending demand letters, threatening litigation, or potentially taking a non-paying customer to court (or small claims court, for smaller claims). Further, there might be some other creative options to ensure payment - such as using requesting joint checks be used, or potentially a promissory note. Unfortunately, though, it is possible for a P3 project to fall through the cracks and miss out on security from both lien rights and bond claim rights - and that's definitely infuriating.

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